Rising Interest Rates, Variable vs Fixed Mortgages, and How to Take Equity Out of Your Home

Sean Cooper Interview

In this episode, we cover the rising interest rate environment that we’re currently in here in Canada, and how it can impact you financially.

We also cover how to decide whether you should go fixed or variable on your mortgage in the current interest rate environment.

Next, we cover the subject of how you can take out some of the equity that you’ve built up in your home, so that you can either use it to invest, or deploy it elsewhere (without having to actually sell your home).

We also discuss the Smith Manoeuvre, which is a technique that you can use here in Canada to make your mortgage interest tax-deductible (and be able to invest a bit easier when you pay down your mortgage).

About Our Guest:

Sean is the bestselling author of the book, Burn Your Mortgage. He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30.

These days, Sean’s helping others burn their mortgages too, as an independent mortgage broker.

Sean has offered to answer for free, any questions that you, the Build Wealth Canada listeners have.

I’ve set up a special page for him so all you have to do is go to buildwealthcanada.ca/sean, enter your email, and Sean will be in touch with you and will be able to answer any questions that you may have.

He’s a licensed mortgage broker too so I definitely also encourage you to reach out to him if you’re looking to get a new mortgage or if your mortgage is coming up for renewal, as at the very least he’ll be able to provide you with a shortlist of the best mortgages that he’s been able to find across all of Canada from the 60+ lenders that he monitors.

None of this costs you anything, and there’s no obligation to get your mortgage through him or use any of those suggested mortgages.

At the very least, you’ll get some good education on the top mortgages available in Canada, you’ll learn what to look for when choosing your next mortgage, and you can always decide later whether you’d like him to help you with the process, or if you want to do it all yourself. It doesn’t cost you anything regardless.

As a bonus, I’ll also email you the Mortgage Checklist, which is a guide on the top things to look for and consider when choosing a mortgage. That link again to get in touch with Sean, get your questions answered, get the free mortgage checklist guide, and get that research on some of the best mortgage in Canada is buildwealthcanada.ca/sean.

Links & Resources Covered:

  1. Free private Q&A with Sean

  2. EQ Bank (The bank that I use with savings account interest rates up to 30x higher compared to other Canadian banks).

  3. Enriched Academy: This is who I use and recommend for financial coaching and financial optimizations. You can receive a free assessment call at the link above.

Questions Covered:

  1. For the first time in over 3 years, the Bank of Canada has started raising interest rates. What should we be considering if we have a variable rate mortgage or have debt that’s tied to the prime rate (like a home equity line of credit)?

  2. For Canadians that have their mortgage coming up for renewal in the near future, or those looking for a new mortgage, based on the current environment, what is the mortgage rate outlook for the coming year and how can those Canadians best decide whether they should go fixed or variable?

  3. From what you’re seeing, what is the real estate market outlook for this coming spring and the rest of the year? Is it likely to be a buyer’s market or a seller’s market? What kind of buying/selling environment should people be ready for if they are thinking of moving, buying/selling a house?

  4. Home prices have grown substantially over the years making many Canadians who already own a house pretty wealthy on paper, but much of that money or equity is tied up in the house, and I’m sure many of us would like to be able to use some of those gains either for investing, or other things. We’ve probably all heard of using a home equity line of credit (HELOC) to take some of that money out, but what are the other options available to us, and what are the pros and cons of using a HELOC vs these other options? 

  5. On the flip side, with the rising cost of living (we’re hearing about inflation a lot), cash flow is becoming a challenge for some Canadians, making it even more difficult to find extra cash to invest for their retirement, while also paying down their mortgage and other expenses. However, there are strategies to pay down your mortgage and invest at the same time. Can you explain this strategy to listeners that are in this situation? And what are the pros and cons? 

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